By Siddhi Nayak
MUMBAI (Reuters) -India’s current account posted a surplus for the first time in four quarters in the January-March period, helped by higher services exports, the central bank said on Friday.
The current account surplus stood at $13.5 billion, or 1.3% of GDP in the fourth quarter of the fiscal year 2024-2025 versus the polled estimate of $8.5 billion, or 0.9% of GDP.
The surplus compares with a deficit of $11.3 billion or 1.1% of GDP in the preceding quarter, the Reserve Bank of India said in a statement. The current account had registered a surplus of $4.6 billion or 0.5% of GDP in the same quarter a year ago.
For the full fiscal year 2024-25, the current account deficit stood at $23.3 billion, or 0.6% of GDP, against $26 billion, or 0.7% of GDP in the previous year, on the back of higher net invisible receipts.
“Apart from persistent strength in services exports, spike in remittances this year to a record high $123 billion was a key driver,” said Kanika Pasricha, chief economic adviser at Union Bank of India.
Pasricha expects full-year current account to log a deficit of 1.2% of GDP amid global trade tensions, with trade deals being “on a close watch.”
India’s net services receipts increased to $53.3 billion in the fiscal fourth quarter from $42.7 billion a year earlier, contributing to the surplus, the RBI said.
“Services exports have risen on a year-on-year basis in major categories such as business services and computer services,” the central bank said.
Personal transfer receipts, which are mainly remittances by Indians employed overseas, increased to $33.9 billion from $31.3 billion a year ago.
Meanwhile, the merchandise trade deficit widened to $59.5 billion, from $52 billion a year earlier, the RBI said.
The country’s balance of payments was at a surplus of $8.8 billion in the March quarter, compared with a surplus of $30.8 billion a year earlier.
The balance of payments recorded a deficit of $5 billion for 2024-25, compared with a surplus of $63.7 billion in the previous year.
“With the current account deficit at modest levels, the swing factor for balance of payments will be the strength of financial flows, particularly portfolio and net FDI inflows, after a weak patch last year,” said Radhika Rao, executive director and senior economist at DBS Bank.
(Reporting by Siddhi Nayak; Editing by Savio D’Souza and Leroy Leo)
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